Background: The quality of life in patients with diabetes is generally low. It appears to be associated with several factors including health literacy. Objective: This study aimed to measure the level of  health literacy, assess quality of life, and determine the relation between health literacy and quality of life among patients with type 2 diabetic attending endocrine outpatient clinic at Ain Shams University Hospital. Methods: A cross-sectional design was conducted. Recruitment was done using a systematic random sampling technique to select 250 type 2 diabetic patients aged 18 and older. An interview questionnaire assessed their health literacy, quality of life, and socio-demographic characteristics. Results: The mean age of the sample was 52.98 ± 11.90 years, with 64.4% being female. Most participants were married (79.2%), and 70.8% were not working. Around 74% never smoked. The mean of glycated hemoglobin (HbA1C) was 7.73 ± 1.44. The highest health literacy scores were observed in the "appraisal of health information" and "understanding health information enough to know what to do" scales. Using multiple linear regression analysis, health literacy score, age, university education, and having other chronic diseases were significantly independent predictors of quality of life. Quality of life improved by attaining a higher educational level. Additionally, the study findings revealed a significant effect of health literacy scores on all health-related quality of life dimensions. Conclusions : Health literacy positively impacts the quality of life in patients with type 2 diabetes. Improving health literacy using a comprehensive educational program can improve patient's quality of life.